Banking spreads on cryptocurrency in Russia: why high fees are doomed to decline
With the start of cryptocurrency banking operations in Russia, spreads will initially be noticeably higher than on classic crypto exchanges. However, banks are unlikely to sustain a markup of 5–7% or more in a competitive market. I arrive at this conclusion by analyzing the current dynamics and structure of the future market.
Why Starting Spreads Will Be High
At the launch stage, banks will be forced to factor significant costs into the price: the cost of liquidity, compliance procedures, risk hedging, and building new infrastructure. In certain products, the markup could reach several basis points, which will inevitably be reflected in the final price for the client. Nevertheless, I do not consider such levels sustainable in the long term.
The key factor here is competition. As soon as several banks and other regulated players enter the market, margins will begin to compress fairly quickly. In this case, the spread will be shaped not so much by the bank's desire to profit, but by the real cost of liquidity and the client's willingness to pay for a regulated framework. The difference from traditional fiat transfer channels will also play a role.
The Role of the Regulator and Market Mechanisms
It is important to understand: the Bank of Russia will primarily regulate access rules, the composition of participants, and market infrastructure, rather than set specific buy and sell quotes. This means that markups may vary significantly across different banks. Within an individual bank, the spread will depend on the number of active users, the volume of real client liquidity, and the cost of liquidity on the balance sheet. I would classify infrastructure and legal costs as secondary factors.
The market, not the regulator, will determine the final price. The mechanism here will resemble the currency market rather than a product with an administratively set tariff. The more liquidity providers there are and the higher the competition among banks, the closer prices will be to market levels.
Who Will Win the Battle for the Client
The mass-market client today is not willing to overpay simply for the word "bank." The level of stress among retail audiences has remained high since 2022: the Russian user is open to many scenarios to meet their needs, but not to an unjustifiably high cost of service. The picture is different for affluent clients. Large capital continues to move between countries, and with an average transaction size of 3–5 million rubles, a person is willing to pay for speed, transparency, and a hassle-free experience. Such a client will choose not their own accountant, but a Russian bank—the question here, in my view, is rhetorical.
My conclusion: in the short term, bank spreads will be higher than exchange spreads, but this is a temporary phenomenon. Competition and market mechanisms will quickly drive them down. The winner will be the one who can offer the client an optimal balance of price and quality, rather than merely the status of a regulated player.